In re Marriage of Rookey

• Court: California Court of Appeals
• Writing for the Court: O'ROURKE, J.
• Decision Date: 22 February 2023
• Docket Number: D079498
• Citation: In re Marriage of Rookey, D079498 (Cal. App. Feb 22, 2023)
• Parties: In re the Marriage of SHEILA D. and KEVIN ROOKEY. v. KEVIN M. ROOKEY, Respondent. SHEILA D. ROOKEY, Appellant,

In re the Marriage of SHEILA D. and KEVIN ROOKEY.

SHEILA D. ROOKEY, Appellant, v. KEVIN M. ROOKEY, Respondent.

D079498

California Court of Appeals, Fourth District, First Division

February 22, 2023

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

APPEAL from a postjudgment order of the Superior Court of San Diego County, Super. Ct. No. ED95811, Edlene C. McKenzie, Judge.

Antonyan Miranda, Anthony John Boucek and Timothy Miranda for Appellant.

Law Office of Linda Cianciolo and Linda Cianciolo for Respondent.

O'ROURKE, J.

Appellant Sheila D. Rookey appeals from a postjudgment order entered following an evidentiary hearing on respondent Kevin Rookey's requests for orders seeking, among other things modifications of child and spousal support, an award of attorney fees, and Family Code^[1] section 271 sanctions. The family court's order reduced monthly spousal support to $900 retroactive to May 2019 stepping down to zero starting January 2024, excluded certain stock-based compensation awarded to Kevin (known as restricted stock units or RSU's) for purposes of calculating support, and found that from May 1, 2019 forward, Kevin did not receive income that would be subject to an Ostler/Smith^[2] division. The court ordered that Sheila pay $35,000 in section 271 sanctions and Kevin pay $35,000 as a contribution to Sheila's attorney fees.

Sheila contends the court prejudicially erred and exceeded its jurisdiction by reducing support retroactive to May 1, 2019, retroactively vacating the Ostler/Smith bonus support component from the judgment, and excluding all of Kevin's RSU's for purposes of calculating support. She additionally challenges the court's determination of Kevin's income available for permanent support as well as its issuance of step-down orders for permanent spousal support over the next three years and decision to terminate its jurisdiction. Sheila finally contends the court erred by ordering her to pay monetary sanctions and awarding her only $35,000 out of her request for $155,000 in attorney fees.

We conclude the court erred by modifying child and spousal support retroactive to May 1, 2019, when Kevin's request for order was filed two weeks later, on May 14, 2019. We also conclude the court's imputation of Kevin's average monthly wages as income for purposes of calculating support effective November 2020 did not follow established legal principles. We remand with directions that the court recalculate support in a manner consistent with the principles discussed below. In all other respects, including with respect to the step-down order as may be modified by the court's recalculation of spousal support, we affirm the postjudgment order.

FACTUAL AND PROCEDURAL BACKGROUND

The parties were married in February 2002 and separated on November 1, 2014. In November 2017, the parties obtained a partial stipulated judgment of dissolution of their 12-year eight-month marriage. In that judgment, the family court reserved jurisdiction over child and spousal support. At the time, the parties had three minor children.^[3]

In December 2018, the family court (Judge Epley) entered a judgment on reserved issues, including child and spousal support. It also considered attorney fees and sanctions. As to child support, the court found Sheila had the ability to work but had not complied with a previously issued Gavron warning^[4] to become self-supporting within a reasonable time period. The court advised Sheila it would consider any continued noncompliance in future support modification motions. Finding Kevin's monthly wages to be $31,158 and imputing to Sheila $28,000 in yearly income, it ordered Kevin to pay $3,363 in monthly child support. The court found that Kevin's RSU's were not income but property to be divided in accordance with its property division orders. It ordered pursuant to Smith/Ostler that Kevin would pay 6.12 percent of his quarterly income above $124,632 toward child support.

The court ordered Kevin to pay Sheila $3,000 in monthly spousal support starting July 1, 2018. It included a 13 percent Ostler/Smith bonus not to exceed $5,000 per month. The court again advised Sheila that if she continued to make little effort to advance her employment it would consider that behavior toward future spousal support modification requests.

The court addressed community debts and offsets, finding Sheila owed Kevin $13,535.29 as an equalization payment. It ordered Sheila to make monthly $500 payments to Kevin as of August 1, 2018, that Kevin could withhold any Ostler/Smith payments as long as Sheila's equalization debt was outstanding, and that the remaining balance would be due in full if Sheila missed more than two months of payments.

As to attorney fees and section 271 sanctions, the court found Kevin had incurred fees due to Sheila's conduct, and ordered Sheila to pay Kevin $7,000 in attorney fees. It ordered Kevin to contribute $15,000 toward Sheila's attorney fees.

In March 2019, Kevin sought correction of the December 2018 judgment as to the Ostler/Smith payments for purposes of spousal and child support, to reflect they should be paid quarterly and to include correct end dates. He asked the court to order that Sheila pay his fees and costs in making the request as a sanction for her delays and failure to abide by certain agreements and orders.

In May 2019, Kevin filed an additional request for an order to modify the child and spousal support orders to the guideline amount, this time representing himself. He averred in a sworn declaration that his employment had been eliminated, he had agreed to a 10-month severance package, and he was requesting his current income be modified to reflect his new monthly wages. In response to Kevin's requests, Sheila sought $38,250 in attorney fees to pay for retaining counsel.

The court eventually set the hearing on both Kevin's and Sheila's requests to August 20, 2019. Kevin later asked that the hearing date be continued to September 6, 2019, to consolidate it with his request for correction of the December 2018 judgment. Sheila opposed Kevin's requests, filing responsive and supplemental declarations as well as points and authorities. She included a request for $6,069 in sanctions for Kevin's assertedly "needless litigation."

In September 2019, the family court heard Kevin's March 2019 request to clarify the judgment, correcting its ruling to reflect that Kevin's gross income was $31,158 monthly or $93,474 each quarter. The court ordered the parties to meet and confer to determine what additional funds Kevin was required to pay within thirty days of the end of each quarter. It stated the equalization issue was not before it, and declined to make an order as to that payment. The court denied both parties' requests for section 271 sanctions.

The family court eventually set Kevin's and Sheila's other pending requests (Kevin's requests for modification of child and spousal support and for sanctions, and Sheila's request for attorney fees) for an evidentiary hearing, which took place over the course of five days in December 2020, January 2021 and March 2021.^[5] Among other things, Kevin testified that after his entire department was eliminated he was unable to locate work comparable to his previous unique job as a relationship manager, leading to his decision in November 2019 to open a new business, Restoration RX. Though he reported to a vocational expert that he had zero income his first year, Kevin testified that Restoration RX's projected earnings in 2020 would be at least $50,000 and would grow the following year. Kevin explained he had not "run those numbers" by the time of the evidentiary hearing and did not have an accurate number for the money Restoration RX had made in the past year. Nevertheless, Kevin anticipated his total net Restoration RX income to be about $100,000, and "upwards of" $150,000 in his third year.^[6]Kevin testified the business was starting to earn roughly $4000 a month, but he had not drawn a paycheck. He accessed funds by selling securities and using his savings. Kevin sought a determination that he made support overpayments as he had paid support for the past 20 months based on an over $400,000 income.

In May 2021, the court issued an ex parte minute order with its findings and orders after the hearings. Questioning whether the court intended the ex parte minute order to be a tentative or final decision, Sheila then requested a formal statement of decision and alternatively objected to the court's ex parte findings and orders.

After considering Sheila's request and objections, the family court in June 2021 issued its final statement of decision.^[7] Sheila filed this appeal from the June 2021 postjudgment order.

DISCUSSION

I. Standard of Review of Support Modification Orders

This court reviews for abuse of discretion the family court's decision to grant or deny modification of a support order. (In re Marriage of Lusby (1998) 64 Cal.App.4th 459, 472.) "Discretion is abused when its exercise is arbitrary, whimsical, or capricious." (In re Marriage of Battenburg (1994) 28 Cal.App.4th 1338, 1343.) We reverse" 'only if prejudicial error is found after examining the record of the proceedings below.'" (Lusby, at p. 472.) Where a party challenges the family court's factual findings," 'our review follows established principles concerning the existence of substantial evidence in support of the findings.... [W]e examine the evidence in the light most favorable to the prevailing party and give that party the benefit of every reasonable inference. [Citation.] We accept all evidence favorable to the prevailing party as true and discard contrary evidence.'" (Ibid.)

We review questions concerning interpretation of statutes as a matter of law. (In re...